H  E 

Z79I 

V4A24 

1886 


ro 

LD 


THE  VERDIGRIS  VALLEY.  INDEPENDENCE 
AND  WESTERN  RAILROAD  COMPANY 


TO 


AMERICAN  LOAN  AND  TRUST 
COMPANY,  Trustee. 


FIRST  MORTGAGE, 


Issue  Limited  to  $10,000  per  Mile  of  Completed  Road. 


BURGOVNE'S  "Quick"  Print,  146-150  Centre  St.,  X.  V. 


made  this  first  day  of  February, 
in  the  year  one  thousand  eight  hundred  and  eighty-six,  BETWEEN 
THE  VERDIGRIS  VALLEY,  INDEPENDENCE  AND  WESTERN  RAILROAD 
COMPANY,  a  corporation  organized  under  the  laws  of  the  State  of 
Kansas  (hereinafter,  for  convenience,  called  the  Railroad  Company), 
and  THE  AMERICAN  LOAN  AND  TRUST  COMPANY,  a  corporation  cre- 
ated by  the  laws  of  the  State  of  New  York  (hereinafter,  for  convenience, 
called  the  Trust  Company  or  the  Trustee). 

MUtttessetft :  That 

WHEREAS,  said  Railroad  Company  is  authorized  by  law  to  construct, 
maintain  and  operate  a  railroad  of  standard  gauge  from  Leroy,  in  said 
State  of  Kansas,  to  or  near  Yates  Centre,  and  to  or  near  Neodosha, 
and  to  or  near  Independence,  and  to  or  near  Sedan,  and  to  or  near 
Arkansas  City,  and  to  Deep  Hole,  and  through  the  Counties  of  Wood- 
son,  Wilson,  Montgomery,  Chautauqua,  Crowley,  Sumner,  Harper. 
Barbour,  Comanche  and  Ford,  all  in  said  State  of  Kansas ;  and 

WHEREAS,  said  Railroad  Company,  by  its  Board  of  Directors,  has 
duly  resolved  to  borrow  money  not  to  exceed  ten  thousand  dollars  per 
mile  of  its  said  lailroad,  and  to  issue  and  dispose  of  its  coupon  bonds 
for  the  amount  so  borrowed,  such  bonds  to  be  numbered  consecutively 
from  one  upwards,  and  to  be  of  the  denomination  of  one  thousand 
dollars  each,  payable  on  the  first  day  of  March,  in  the  year  nineteen 
hundred  and  twenty-six,  in  gold  coin  of  the  United  States  of  the  present 
standard  weight  and  fineness,  at  the  office  of  said  Trust  Company,  or 
other  fiscal  agency  of  said  Railroad  Company,  in  the  City  of  New  York, 
said  bonds  to  draw  interest  at  the  rate  of  five  per  centum  per  annum, 
payable  semi- annually,  in  like  coin,  at  the  office  of  said  Trust  Company, 
upon  the  presentation  and  surrender  of  the  proper  interest  coupons ; 
and,  for  the  purpose  of  securing  the  payment  of  the  principal  and  inter- 
est of  said  bonds,  has  resolved  to  mortgage  to  said  Trust  Company,  as 

M114721 


Trustee,  all  the  corporate  property  and  franchises  now  owned,  or  which 
;m^y:  be5  liereaftet  acquired  by  said  Railroad  Company ;  and  has  also 
resolved  that  such  bonds  and  mortgage  shall  be  in  such  form  and 
shall  contain  such  usual  provisions,  covenants  and  conditions  as  may 
be  adopted  and  approved  by  the  President  of  said  Railroad  Company, 
and  that  the  same  shall  be  executed  by  the  said  President  under  his 
signature  and  the  corporate  seal  of  said  Railroad  Company,  attested  by 
the  signature  of  its  Secretary ;  and  has  also  resolved  that  none  of  said 
bonds  shall  be  issued  or  be  valid  for  any  purpose  until  certified  by  said 
Trust  Company  to  have  been  issued  pursuant  to  the  provisions  of  this 
mortgage ;  and  that  none  of  said  bonds  shall  be  so  certified  until  at 
least  five  miles  of  said  railroad  shall  have  been  so  far  completed  as 
to  be  in  suitable  condition  for  the  running  of  trains  thereon,  when 
said  bonds  may  be  certified  and  issued  to  the  amount  of  ten  thousand 
dollars  per  mile  for  each  and  every  mile  so  completed ;  and  that  there- 
after, from  time  to  time,  as  additional  portions  of  said  railroad  shall  be 
so  completed,  further  amounts  of  said  bonds,  at  the  rate  of  ten  thou- 
sand dollars  for  each  additional  mile  so  completed,  may  be  certified 
and  issued ;  and  so  on  until  the  whole  of  said  railroad  shall  have  been 
so  completed  and  all  the  bonds  so  authorized  shall  have  been  certified 
and  issued ;  provided,  always,  that  the  aggregate  amount  of  bonds  so 
certified  and  issued  shall  at  no  time  exceed  ten  thousand  dollars  per 
mile  of  completed  railroad  owned  by  said  Railroad  Company,  not  in- 
cluding switches,  turnouts  or  sidings ;  and, 

WHEREAS,  the  said  Railroad  Company  and  its  President  have 
adopted  and  approved  the  following  form  for  said  bonds,  and  for  the 
coupons  thereto  annexed,  and  for  the  Trustee's  certificate  to  be  en- 
dorsed thereon,  to  wit  : 


3 

(FORM  OF  BOND.) 

si, ooo.         UNITED    STATES    OF   AMERICA, 

STATE  OF  KANSAS. 

THE     VERDIGRIS      VALLEY,     INDEPENDENCE      AND 
WESTERN  RAILR  OAD    COMPANY. 

FIRST  MORTGAGE  GOLD  BOND. 

KNOW  ALL  MEN  BY  THESE  PRESENTS,  that  the  Verdigris  Valley, 
Independence  and  Western  Railroad  Company  is  justly  indebted  to  the 
American  Loan  and  Trust  Company  of  New  York,  or  bearer,  in  the 
sum  of  one  thousand  dollars,  which  it  promises  to  pay  in  gold  coin  of 
the  L'nited  States  of  the  present  standard  of  weight  and  fineness,  at  the 
office  of  said  American  Loan  and  Trust  Company,  or  other  fiscal 
agency  of  said  Railroad  Company,  in  the  City  of  New  York,  on  the 
first  day  of  March,  in  the  year  of  our  Lord  nineteen  hundred  and 
twenty-six,  with  interest  at  the  rate  of  five  per  centum  per  annum,  pay- 
able semi-annually,  on  the  first  days  of  March  and  September  in  each 
year,  in  like  gold  coin,  upon  the  presentation  and  surrender,  at  the  office 
of  said  American  Loan  and  Trust  Company,  of  the  proper  interest  war- 
rants or  coupons  issued  herewith,  the  first  of  which  will  become  pay- 
able September  first,  1886. 

This  bond  is  one  of  a  series  numbered  consecutively  from  one  up- 
wards, all  of  the  same  tenor  and  date,  the  whole  issue  of  which  is 
strictly  limited  to  ten  thousand  dollars  per  mile  of  railway  owned  by 
said  Railroad  Company,  and  actually  completed  and  in  suitable  condi- 
tion for  the  running  of  trains  thereon ;  the  payment  of  the  principal  and 
interest  of  which  bonds  is  secured  by  a  first  mortgage  or  deed  of  trust  of 
all  the  corporate  property  and  franchises  now  owned  or  possessed,  or 
which  may  hereafter  be  acquired,  by  said  Railroad  Company,  made  to 
the  said  American  Loan  and  Trust  Company,  as  Trustee,  which  mort- 
gage or  deed  of  trust  has  been  duly  executed,  delivered  and  recorded, 
and  which  provides,  among  other  things,  that  none  of  said  bonds  shall 
be  valid  for  any  purpose  until  duly  certified  by  said  Trustee  to  have 


been  issued  pursuant  to  the  provisions  of  said  mortgage;  that  the 
amount  of  bonds  so  certified  shall  at  no  time  exceed  the  rate  of  ten 
thousand  dollars  per  mile  of  completed  railway  owned  by  said  Railroad 
Company ;  and  that  if  default  shall  continue  for  the  period  of  six 
months  after  actual  demand  duly  made  for  the  payment  of  such  interest, 
then  the  principal  of  all  of  said  bonds  shall,  at  the  option  of  said  Trustee 
(subject  to  the  control  of  the  holders  of  a  majority  of  said  bonds,  as  in 
said  mortgage  provided)  become  and  be  immediately  due  and  payable, 
anything  in  said  bonds  or  in  said  mortgage  to  the  contrary  in  any  wise 
notwithstanding. 

IN  WITNESS  WHEREOF,  the  Verdigris  Valley,  Independence  and 
Western  Railroad  Company  has  caused  its  corporate  seal  to  be  hereto 
affixed  and  this  bond  to  be  signed  by  its  President  and  attested  by  its 
Secretary,  and  the  coupons  thereto  attached  to  be  attested  by  the  en- 
graved signature  of  its  Treasurer  this  first  day  of  February,  Anno 
Domini  1886. 

THE   VERDIGRIS  VALLEY,  INDEPENDENCE  AND 
WESTERN  RAILROAD  COMPANY 
By 

President. 
Attest : 

Secretary. 


(COUPON.  ) 

$25.  $25. 

The  Verdigris  Valley,  Independence  and  Western  Railroad  Com- 
pany will  pay  to  bearer,  at  the  office  of  the  American  Loan  and  Trust 
Company,  in  the  City  of  New  York,  twenty-five  dollars,  gold  coin,  for 
six  months'  interest,  due  ist,  18  ,  on  its  First  Mortgage 

Bond  No. 

Treasurer. 


5 

(TRUSTEE'S  CERTIFICATE.  ) 

The  American  Loan  and  Trust  Company  hereby  certifies  that  the 
within  bond  is  one  of  the  series  therein  mentioned,  and  that  the  same 
is  duly  issued  pursuant  to  the  provisions  of  the  mortgage  therein  men- 
tioned, which  mortgage  has  been  duly  executed  and  delivered  to  this 
Trustee  and  filed  for  record  according  to  law. 

AMERICAN  LOAN  AND  TRUST  COMPANY,    Trustee, 
By 

President. 

AND,  WHEREAS,  the  President  of  said  Railroad  Company  and  the 
said  Company  have  also  adopted  and  approved  the  form  of  this 
present  indenture,  and  all  the  provisions,  covenants  and  conditions 
therein  contained  : 


r  in  consideration  of  the  premises,  and  of  the 
sum  of  one  dollar  to  it  in  hand  paid  by  the  said  Trust  Company,  the 
receipt  whereof  is  hereby  acknowledged,  and  for  the  purpose  of  more 
effectually  securing  the  payment  of  the  principal  and  interest  of  all  of 
said  bonds,  according  to  the  true  intent  and  meaning  thereof,  the  said 
The  Verdigris  Valley,  Independence  and  Western  Railroad  Company 
by  these  presents  doth  grant,  bargain,  sell,  alien,  remise,  release,  con- 
vey, confirm,  assign,  transfer  and  set  over  to  the  said  American  Loan 
and  Trust  Company,  its  successors  and  assigns  forever,  Jt-Xl  the 
corporate  property,  real,  personal  and  mixed,  now  owned  or  which  may 
hereafter  be  acquired  by  the  said  Railroad  Company,  including  all  its 
railroad  now  in  process  of  construction  or  about  to  be  constructed  in 
the  State  of  Kansas,  as  the  same  now  is  or  hereafter  may  be  located, 
and  all  the  lands  acquired  and  used,  or  which  may  hereafter  be  acquired 
and  used,  for  said  railroad,  or  for  any  purpose  in  connection  with  the 
construction,  maintenance  or  operation  thereof,  and  all  rights  of  way, 
road-beds,  tracks,  bridges,  viaducts,  culverts,  switches,  turnouts,  sid- 
ings, turn-tables,  fences,  depots,  station-houses,  station-grounds,  yards, 
freight-houses,  warehouses,  engine-houses,  car-houses,  fuel-houses, 
sheds,  machine  shops  and  other  shops,  water-tanks  and  all  other  struc- 


6 

tures;  erections  and  fixtures  of  every  sort  appurtenant  to  said  railroad 
or  any  portion  thereof;  ALSO  all  rolling  stock  and  equipments  of 
every  description,  including  locomotives  and  their  appurtenances,  pas- 
senger and  freight  cars,  sleeping  cars,  coal-cars,  cattle-cars  and  all  trucks 
and  vehicles  of  every  character  owned  or  possessed,  or  which  may 
hereafter  be  acquired  by  said  Railroad  Company,  and  designed  for  use, 
or  capable  of  being  used,  upon  the  railway  of  said  Railroad  Company  ; 
ALSO  all  tools,  implements  and  machinery,  instruments,  furniture, 
safes,  books,  accounts,  maps,  field-notes,  surveys  and  charts  belonging, 
or  which  may  belong,  to  said  Railroad  Company  and  used,  or  intended 
to  be  used,  or  capable  of  being  used,  in  connection  with  the  construc- 
tion, completion,  equipment  or  operation  of  said  railroad;  ALSO  all 
materials  and  supplies  of  every  character  owned  and  possessed  or 
hereafter  acquired  by  said  Railroad  Company  designed  to  be  used,  or 
capable  of  being  used,  in  the  construction,  completion,  equipment,  use 
or  operation  of  the  said  railroad  or  any  portion  thereof.  TOGETHER 
with  all  and  singular  the  tenements,  hereditaments  and  appurtenances 
thereunto  belonging  or  in  anywise  appertaining,  and  the  rents,  freights, 
tolls,  issues,  income  and  profits  thereof,  and  of  every  portion  thereof; 
and  ALSO  all  the  corporate  and  other  franchises,  privileges,  rights,  lib- 
erties and  immunities  of  every  sort  now  owned,  possessed  or  enjoyed,  or 
which  may  hereafter  be  acquired,  owned,  possessed  or  enjoyed,  by  said 
Railroad  Company  ;  To  HAVE  AND  TO  HOLD  the  same  and  every  part 
and  parcel  thereof,  with  the  appurtenances,  unto  the  said  Trust  Com- 
pany, its  successors  and  assigns  forever,  UPON  TRUST,  nevertheless,  for 
the  equal  pro  rata  security,  protection,  benefit  and  behoof  of  all  parties 
who  may  be  or  become  the  holders  of  any  of  the  above-mentioned 
bonds,  SUBJECT,  however,  to  the  following  provisions,  covenants  and 
conditions  which  are  hereby  expressly  adopted,  approved  and  assented 
to  by  both  parties  to  these  presents,  to  wit : 

ARTICLE  FIRST.  None  of  the  bonds  intended  to  be  secured  hereby 
shall  be  valid  for  any  purpose  until  certified  and  issued  as  follows  : 
Upon  the  completion  of  at  least  five  miles  of  said  railroad,  exclusive 
of  switches,  turnouts  and  sidings,  said  Railroad  Company  may  submit 
to  said  Trust  Company  the  certificate  of  its  Chief  Engineer  showing  how 
many  miles  have  been  completed,  and  the  points  from  and  to  which  the 


completed  portion  extends,  and  certifying  that  the  same  is  in  suitable 
condition  for  the  running  of  trains  thereon,  and  may  thereupon  make 
requisition  in  writing  for  an  issue  of  bonds  hereunder ;  and  said  Trust 
Company,  upon  being  satisfied  of  the  truth  of  the  statement  contained 
in  said  certificate,  shall  certify  and  issue  ten  of  said  bonds  (commencing 
with  the  bond  numbered  one  and  following  the  numbers  consecutively) 
for  each  mile  of  said  railroad  so  completed ;  and  thereafter,  as  often  as 
five  or  more  additional  miles  of  said  railroad  shall  be  so  completed  and 
certified,  and  upon  like  requisition,  said  Trust  Company  upon  being  satis- 
fied as  aforesaid,  shall  certify  and  issue  additional  portions  of  said  bonds, 
and  so  on  until  the  whole  of  said  railroad  shall  have  been  so  completed 
and  all  of  said  bonds  shall  have  been  issued;  PROVIDED,  ALWAYS, 
that  the  bonds  so  issued  shall  at  no  time  exceed  the  rate  of  ten  bonds 
per  mile  of  completed  railroad  owned  by  said  Railroad  Company,  ex- 
clusive of  switches,  turnouts  and  sidings. 

Before  making  requisition  for  any  of  said  bonds  the  said  Railroad 
Company  shall  certify  to  said  Trust  Company  the  full  name  of  its  Chief 
Engineer;  and  as  often  as  any  change  shall  occur  in  the  office  of  Chief 
Engineer,  the  fact  of  such  change,  and  the  full  name  of  the  new  in- 
cumbent, shall  be  so  certified ;  and  said  Trust  Company  may  accept  the 
certificate  of  any  person  so  certified  to  be  the  Chief  Engineer  of  said 
Railroad  Company  as  conclusive  proof  of  the  facts  therein  stated,  and 
shall  not  be  bound  to  verify  the  same,  nor  incur  any  liability  because 
of  any  over-issue  of  bonds  caused  by  any  error  in  any  such  certificates, 
unless  chargeable  with  actual  notice  of  such  error.  Every  such  certifi- 
cate shall  correctly  state  the  whole  number  of  miles  of  said  railroad  at 
the  date  thereof  so  completed,  and  the  terminal  points  of  the  completed 
portion. 

ARTICLE  SECOND.  Until  default  be  made  in  the  payment  of  some 
portion  of  the  principal  or  interest  of  said  bonds,  or  in  respect  to  some- 
thing else  by  these  presents  required  to  be  done,  observed  or  performed 
by  said  Railroad  Company,  said  Railroad  Company,  its  successors  and 
assigns,  shall  retain  the  possession  of  and  continue  to  operate  and  con- 
trol its  said  railroad,  and  to  enjoy  all  the  rights,  liberties  and  franchises 
hereby  mortgaged,  and  may  take,  collect,  receive  and  use  the  earnings, 


8 

tolls,  freights,  rents,  issues,  income  and  profits  thereof  in  any  manner 
not  inconsistent  with  the  purpose  of  these  presents,  and  which  shall  not 
impair  the  value  of  said  mortgaged  property,  nor  tend  to  lessen  the 
security  intended  to  be  provided  hereby. 

And  if,  at  any  time,  said  Railroad  Company  shall  deem  it  expedient 
to  alter  any  portion  of  the  route  of  its  said  railroad,  or  to  change  the 
position,  or  discontinue  the  use,  of  any  yard,  depot,  station  or  any  other 
structure  belonging  thereto,  by  reason  whereof  any  real  estate  thereto- 
fore occupied  as  road-bed,  or  as  a  site  for,  or  used  in  connection  with, 
any  such  yard,  depot,  station  or  other  structure,  shall  be  deemed  no 
longer  needful  for  such  purpose,  or  for  any  use  essential  to  the  success- 
ful or  convenient  operation  of  said  railroad  or  its  appurtenances,  or  if 
any  lands  used  or  designed  to  be  used  as  a  source  of  supply  of,  or  place 
of  deposit  for,  materials  of  any  character  to  be  used  in  the  construction, 
equipment  or  operation*  of  said  railroad  shall  be  deemed  by  said  Rail- 
road Company  to  be  no  longer  needful  or  available  for  such  purpose,  or 
for  any  purpose  essential  or  advantageous  to  said  Railroad  Company, 
any  such  land  and  its  appurtenances  may,  with  the  consent  of  the 
Trustee,  be  sold  or  otherwise  disposed  of  by  said  Railroad  Company, 
and  may  be  released  or  otherwise  discharged  by  the  Trustee  from  the 
lien  hereof;  and  any  portion  of  the  rolling  stock,  equipment,  machinery, 
tools,  implements  or  other  personal  property  of  said  Railroad  Company, 
which  may  be  or  become  so  far  worn  out,  damaged  or  superseded  by 
other  property  of  like  character,  as  to  be  no  longer  needful  or  convenient 
for  the  successful  operation  of  said  railroad  or  its  appurtenances,  may, 
with  the  like  consent,  be  sold  or  otherwise  disposed  of,  and  in  like 
manner  released  or  otherwise  discharged;  Provided,  however,  that  all 
land  and  all  other  property,  real  and  personal,  acquired  in  lieu  of,  or 
substituted  for,  any  so  sold  or  otherwise  disposed  of,  shall,  ipso  facto, 
become  and  be  subject  to  the  lien  hereby  created,  or  intended  so  to  be, 
as  fully  and  with  the  same  effect  as  if  now  owned  by  said  Railroad 
Company  and  expressly  described  and  identified  herein. 

ARTICLE  THIRD.  The  said  Railroad  Company  does  hereby,  for  itself, 
its  successors  and  assigns,  covenant  and  agree  to  pay  to  the  several 
holders  of  said  bonds  the  principal  sums  mentioned  therein  and  the 
interest  thereon,  according  to  the  true  intent  and  meaning  of  said 


9 

bonds  and  of  the  coupons  thereto  attached ;  and  also  to  pay  and  dis- 
charge, or  cause  to  be  paid  and  discharged,  all  taxes,  assessments,  rates 
and  other  charges  of  every  sort  which  may  be  levied,  assessed  or  laid 
by  any  lawful  authority  upon  any  portion  of  the  hereby  mortgaged 
property  or  franchises,  within  six  months  after  the  same  shall  have  be- 
come payable  ;  and  to  do  all  things  which  may  be  necessary  to  preserve 
intact,  and  to  continue  the  priority  of  the  lien  created,  or  intended  to 
be  created,  by  these  presents,  upon  all  the  property,  both  real  and 
personal,  and  all  the  franchises,  liberties,  rights  and  privileges  hereby 
mortgaged  or  intended  so  to  be,  over  every  other  lien  or  encumbrance 
thereon ;  and  that  if  it,  the  said  Railroad  Company,  its  successors  or 
assigns,  shall  at  any  time  make  any  lease,  sale  or  other  disposition  of 
its  railroad,  or  any  contract  respecting  the  operation  thereof,  the  same 
shall,  in  express  terms,  be  made  subject  to  these  presents,  and  to  all  the 
stipulations,  covenants  and  agreements  on  the  part  of  said  railroad 
company,  its  successors  and  assigns,  herein  contained. 

ARTICLE  FOURTH.  If  the  principal  and  interest  of  a\\  of  said  bonds 
shall  be  promptly  paid  in  full,  when  due,  according  to  the  terms  of  said 
bonds  and  the  coupons  thereto  attached,  then  and  from  thenceforth  as 
well  these  presents  and  all  the  estate,  right,  title  and  interest  hereby 
granted,  as  said  bonds,  shall  become  and  be  void,  anything  herein  or  in 
said  bonds  to  the  contrary  notwithstanding;  and  thereupon  the  trustee, 
upon  receiving  all  reimbursement  and  compensation  to  which  it  may  be 
entitled,  if  any,  and  upon  being  satisfied  that  such  payment  has  been 
made,  shall  execute  and  deliver  such  acknowledgment  of  satisfaction  or 
such  other  deed  of  release  or  reconveyance  as  may  be  needful  to  dis- 
charge all  the  property,  franchises,  rights,  liberties  and  immunities 
covered  by  this  mortgage  from  the  lien  thereof. 

ARTICLE  FIFTH.  But  if  default  be  made  in  the  payment  of  any  por- 
tion of  said  principal  or  interest  when  due,  and  if  any  such  default 
shall  continue  for  the  period  of  six  months  after  demand  of  payment 
duly  made,  or  if  default  be  made  in  the  performance  of  any  other 
promise,  stipulation,  covenant  or  agreement  on  the  part  of  said  Rail- 
road Company  herein  contained,  and  if  such  default  be  continued  for 
the  period  of  six  months  after  demand  by  the  Trustee  for  the  perform- 


10 

ance  of  such  promise,  stipulation,  covenant  or  agreement,  and  if  such 
default  of  payment  or  performance  be  not  waived  as  hereinafter  pro- 
vided, then,  and  in  either  of  said  cases,  after  the  expiration  of  said 
period  of  six  months,  the  Trustee,  upon  the  request  of  the  holder  or 
holders  of  any  of  said  bonds,  may,  and,  upon  the  written  request  of  the 
holders  of  one-fourth  in  amount  of  all  of  said  bonds  then  outstanding, 
accompanied  by  indemnity  as  hereinafter  provided,  shall,  enter  into  and 
upon,  and  take  possession,  management  and  control  of  all  the  property 
and  appurtenances  of  every  nature,  and  all  franchises,  liberties,  rights 
and  privileges  covered  by  these  presents,  or  intended  so  to  be ;  and 
shall  have,  hold,  use  and  enjoy  the  same  and  every  part  thereof  as 
fully  as  said  Railroad  Company,  its  successors  or  assigns,  could  do  if 
lawfully  in  possession  thereof ;  and  by  its  own  managers,  superintend- 
ents, and  other  attorneys,  agents  or  servants,  may  operate  said  railroad, 
and  conduct  the  business  and  exercise  the  franchises  thereof,  and  may 
make  all  needful  repairs,  alterations  and  additions  therein  and  thereto, 
and  replacements  thereof;  and  may  take,  collect  and  receive  all  the 
earnings,  fares,  tolls,  freights,  rents,  issues  and  income  thereof;  and 
may  apply  so  much  of  the  moneys  derived  therefrom  as  may  be  need- 
ful to  the  payment  of  the  expenses  of  taking  possession  of  operating 
and  maintaining  said  railroad,  and  of  conducting  the  business  thereof, 
and  all  legal  expenses  incurred  in  connection  therewith,  and  to  the  pay- 
ment of  the  costs  of  all  repairs,  alterations,  additions  and  replacements 
made  as  aforesaid,  and  to  the  payment  and  discharge  of  any  taxes,  as- 
sessments and  other  charges  on  any  of  said  property  which  may  be  or 
become  entitled  to  priority  over  the  lien  of  this  mortgage ;  and  after 
deducting  all  payments  so  made,  and  reasonable  compensation  for  its 
own  services,  shall  apply  the  residue  of  the  moneys  arising  as  aforesaid 
to  the  payment  and  discharge  of  the  obligations  of  said  Railroad  Com- 
pany in  respect  to  which  default  shall  have  been  made  as  aforesaid, 
ratably  and  without  preference  or  priority  among  the  holders  of  such 
obligations. 

IF  the  default  by  reason  whereof  possession  shall  have  been  taken  as 
aforesaid  shall  be  other  than  in  payment  of  the  principal  of  any  of  said 
bonds,  and  if  the  residue  of  the  moneys  coming  to  the  hands  of  the  Trus- 
tee as  aforesaid  shall  suffice  to  discharge  the  obligations  in  respect  of 
which  such  default  shall  have  been  made,  and  if  the  option,  herein- 


11 

after  provided  for,  to  declare  the  principal  of  said  bonds  due,  shall  not 
have  been  exercised,  or  if  the  exercise  thereof  shall  have  been  revoked 
and  annulled  as  hereinafter  provided,  then  the  Trustee,  after  the  dis- 
charge of  all  such  defaulted  obligations,  shall  restore  the  possession, 
management  and  control  of  all  of  said  mortgaged  property,  in  the  con- 
dition in  which  the  same  shall  then  be,  to  said  Railroad  Company,  its  suc- 
cessors or  assigns,  subject',  however,  to  all  the  provisions,  covenants 
and  conditions  hereof,  which  shall  thenceforth  have  the  same  force 
and  effect  as  if  no  default  had  occurred. 

ARTICLE  SIXTH.  If  any  default  be  made  and  continued  for  six  months 
as  in  the  last  preceding  article  specified,  then  the  principal  of  all  of  said 
bonds,  although  not  yet  due  by  the  terms  thereof,  shall,  at  the  option  of 
the  Trustee,  become  and  be  immediately  due  and  payable,  anything  in 
said  bonds  or  herein  contained  to  the  contrary  notwithstanding ;  provided \ 
however,  that  such  option  shall  be  exercised  only  at  the  request  of  the 
holder  or  holders  of  at  least  one-fourth  of  all  of  said  bonds  then  out- 
standing, and  provided  also,  that  the  holder  or  holders  of  a  majority  of 
said  bonds  then  outstanding  may  by  an  instrument  in  writing  signed  by 
him  or  them,  instruct  and  require  the  Trustee  to  waive,  or  defer  the  ex- 
ercise of  such  option,  on  such  terms  and  conditions  as  the  holder  or 
holders  of  such  majority  may  deem  proper;  or  may  reverse  or  annul 
the  election  of  the  Trustee,  if  already  exercised.  But  the  exercise  of 
the  power  so  to  control  said  option  shall  not  in  any  manner  affect  the 
right  to  exercise  said  option  upon  any  subsequent  default ;  nor  shall 
such  power  of  control  extend  to  more  than  three  consecutive  defaults,  if 
the  holder  or  holders  of  one-fourth  of  said  bonds  then  outstanding,  hav- 
ing furnished  indemnity  as  hereinafter  provided,  shall  require  the  Trustee 
to  exercise  said  option,  and  to  proceed  to  foreclose  this  mortgage. 

ARTICLE  SEVENTH.  If  any  default  is  made  and  continued  as  in  the  fifth 
article  specified,  and  if  such  default  be  not  waived  as  hereinafter  provi- 
ded, the  Trustee,  upon  the  request  of  the  holder  or  holders  of  any  of  said 
tonds  may,  and  upon  the  written  request  of  the  holder  or  holders  of  at 
least  one-fourth  of  said  bonds  then  outstanding,  accompanied  by  indem- 
nity as  hereinafter  provided,  shall,  after  entry  as  aforesaid,  or  without 
-entry,  proceed  to  foreclose  this  mortgage  and  to  enforce  the  rights  of 


12 

the  bondholders  thereunder,  either  by  the  advertisement  and  sale  of 
the  mortgaged  property  and  franchises  as  an  entirety,  at  such  time  and 
place  and  upon  such  notice  as  may  be  required  by  the  laws  of  the  State 
of  Kansas  in  that  behalf  enacted,  or,  if  there  be  then  no  laws  of  said 
State  of  binding  and  controlling  force  in  the  premises,  then  by  sale  at 
public  auction  either  at  the  City  of  Independence,  in  the  State  of  Kan- 
sas, or  at  the  City  of  New  York,  notice  of  the  time  and  place  of  sale 
having  first  been  given  by  the  publication  thereof  at  least  once  in  each 
week  for  three  consecutive  months  immediately  prior  to  the  time  ap- 
pointed for  the  sale,  in  some  newspaper  of  general  circulation  published 
at  Independence,  in  the  State  of  Kansas,  and  in  some  newspaper  of 
general  circulation  published  in  the  City  of  New  York;  or  such  foreclo- 
sure and  the  enforcement  of  the  rights  of  the  bondholders  may,  at  the 
option  of  the  Trustee,  be  by  suitable  judicial  proceedings  in  any  Court 
of  law  or  equity  having  jurisdiction  in  the  premises,  in  which  event  the 
sale  shall  be  at  such  place  and  upon  such  notice  as  the  judgment  or  de- 
cree of  such  Court  may  prescribe ;  and  the  Trustee  may  adjourn  any 
such  sale  from  time  to  time,  upon  such  notice  as  it  may  deem  proper, 
or  as  may  be  prescribed  by  law  or  by  any  such  judgment  or  decree,  and 
may  make  and  deliver  to  the  purchaser  or  purchasers  at  such  sale  a 
good  and  sufficient  grant,  conveyance  and  transfer  of  all  the  property, 
franchises,  rights  and  liberties  sold  ;  and  the  sale  so  made  and  the  grant, 
conveyance  and  transfer  made  in  pursuance  thereof  shall  be  a  perpetual 
bar,  both  at  law  and  in  equity,  against  the  said  Railroad  Company,  its 
successors  or  assigns,  and  against  all  persons  claiming  or  to  claim  said 
property  or  franchises,  or  any  portion  thereof,  through,  from  or  under 
it  or  them. 

The  purchaser  or  purchasers  at  any  sale  made  under  the  power 
hereby  conferred,  or  under  judicial  authority  exercised  in  the  enforce- 
ment hereof,  shall  be  entitled  to  use  and  apply  in  making  payment,  any 
of  the  bonds  or  due  coupons  hereby  secured,  reckoning  and  computing 
the  same  at  a  sum  equal  to  the  share  of  the  proceeds  of  such  sale 
which  would  be  payable  to  such  purchaser  or  purchasers,  as  the  holder 
or  holders  of  said  bonds  or  coupons,  if  the  sale  were  made  wholly  for 
cash.  The  purchaser  or  purchasers,  having  complied  with  the  terms  of 
sale,  and  being  in  possession  of  the  receipt  of  the  Trustee  for  the 
purchase  money,  shall  not  be  answerable  for  any  loss,  misapplication  or 


13 

non-application  of  the  purchase  money  or  any  part  thereof  by  the 
Trustee,  nor  be  under  any  obligation  to  inquire  into  the  necessity, 
expediency  or  authority  of  or  for  such  sale. 

At  any  such  sale  the  Trustee,  if  requested  so  to  do  by  the  holder  or 
holders  of  a  majority  of  said  bonds,  may  bid  for  and  purchase,  or 
•cause  to  be  bidden  for  and  purchased,  the  said  mortgaged  property  and 
franchises,  as  an  entirety,  for  and  on  behalf  of  the  holders  of  all  of  said 
bonds  then  outstanding,  according  to  their  respective  holdings  thereof, 
at  a  price  not  exceeding  the  aggregate  amount  unpaid  upon  said  bonds 
so  outstanding  and  the  accrued  interest  thereon,  and  the  expenses  of 
the  sale  and  all  expenses  preliminary  or  incident  thereto  ;  and  in  that 
event  the  several  holders  of  said  bonds  shall  become  and  be  entitled  to 
an  interest  in  the  property  and  franchises  so  purchased  proportionate  to 
the  sums  due  them  respectively  as  the  holders  of  said  bonds,  and  shall 
contribute  in  like  proportions  to  the  said  expenses.  In  the  event  of 
the  reorganization  of  said  Railroad  Company  in  the  interest  of  the 
holders  of  said  bonds,  after  the  foreclosure  of  this  mortgage,  or  of  the 
organization  of  another  company,  in  their  interest,  to  purchase,  hold, 
own  and  operate  said  railroad,  the  Trustee  shall,  so  far  as  it  may  be 
able,  co-operate  in,  assist  and  further  such  reorganization,  or  such 
organization  of  another  corporation. 

ARTICLE  EIGHTH.  The  rights  of  entry  and  sale  hereinbefore  granted 
are  cumulative  and  additional  to  all  other  remedies  allowed  by  law, 
and  the  same  shall  not  be  deemed  or  construed  in  any  manner  to 
deprive  the  Trustee,  or  the  beneficiaries  under  this  Trust,  of  any  legal 
or  equitable  remedy  by  judicial  proceedings  consistent  with  the 
provisions  of  these  presents,  according  to  the  true  intent  and  meaning 
thereof,  or  that  may  be  permitted  by  any  Court  of  competent  jurisdic- 
tion in  the  premises :  Provided  always,  and  it  is  hereby  expressly 
declared  and  agreed,  that  no  holder  or  holders  of  any  of  the  bonds 
secured  hereby  shall  have  the  right  to  institute  any  action  or  proceeding 
in  equity  or  at  law  for  the  foreclosure  of  this  mortgage,  or  to  enforce 
the  trusts  thereof,  or  any  other  action,  suit  or  proceeding  hereunder, 
without  having  first  given  notice  in  writing  to  the  Trustee  of  the 
occurrence  and  continuance  of  the  default  which  may  be  supposed  to 
warrant  the  desired  suit,  action  or  proceeding,  and  having  requested 


14 

the  Trustee,  and  having  afforded  it  reasonable  opportunity,  to  institute 
such  action  or  proceeding  in  its  own  name,  and  for  the  benefit  of  all 
the  holders  of  said  bonds  ;  nor  without  having  also  offered  the  Trustee 
satisfactory  security  and  indemnity  as  hereinafter  provided ;  and  such 
notification,  request  and  offer  of  indemnity  shall  be  conditions 
precedent  to  any  action,  suit  or  proceeding,  or  right  of  action,  on  the 
part  of  any  of  the  holders  of  said  bonds  to  enforce  their  rights 
hereunder. 

ARTICLE  NINTH.  The  rights  resulting  from  the  occurrence  and 
continuance  for  six  months  of  any  default  on  the  part  of  said  Railroad 
Company  hereinbefore  specified  may  be  waived  by  the  holders  of  a 
majority  of  said  bonds  then  outstanding,  by  an  instrument  in  writing 
signed  by  them,  upon  such  terms  and  conditions  as  may  be  assented 
to  by  them  and  embodied  in  such  instrument ;  and  any  such  waiver 
shall  be  binding  upon  the  holders  of  all  of  said  bonds  and  upon  the 
Trustee;  and  such  rights  may  be  so  waived  even  after  action  taken  or 
proceedings  begun  by  reason  of  such  default  pursuant  to  any  of  the 
provisions  of  these  presents;  and  in  that  event  any  such  action  or 
proceeding  may  be  stayed,  suspended  or  wholly  discontinued,  as  the. 
holders  of  the  majority  of  said  bonds  may  determine;  Provided^ 
however,  that  no  such  waiver  shall  extend  to,  or  be  taken  to  affect  or 
impair,  any  right  arising  from  any  subsequent  default ;  and  Provided 
also,  that  in  no  event  shall  such  power  of  waiver  be  exercised  in 
respect  to  more  than  three  successive  defaults,  if  the  holder  or  holders 
of  any  of  said  bonds,  having  furnished  indemnity  as  hereinafter 
provided,  shall,  in  writing,  require  the  Trustee  to  proceed  to  enforce 
their  rights  resulting  from  such  repeated  defaults ;  and  Provided  further, 
that  no  action  or  proceeding  which  shall  have  been  actually  begun  shall 
be  so  stayed,  suspended  or  discontinued  until  all  expenses  incurred 
therein,  and  the  reasonable  compensation  of  the  Trustee,  shall  have 
been  paid  or  satisfactorily  provided  for,  either  by  said  Railroad 
Company  or  by  the  bondholders  desiring  to  stay,  suspend  or  discontinue 
such  action  or  proceeding. 

ARTICLE  TENTH.   The    said    Railroad    Company   does   hereby,  for 
itself,  its  successors   and   assigns,  irrevocably  waive  the  benefit  of  any 


15 

extension,  stay,  valuation  or  appraisement  laws  of  the  State  of  Kansas, 
now  existing  or  which  may  hereafter  be  enacted. 

ARTICLE  ELEVENTH.  The  word  "  Trustee,"  when  used  in  this 
instrument,  shall  for  all  purposes  mean,  include  and  describe  the  person 
or  persons,  or  body  6r  bodies  corporate,  who  or  which  shall  at  any 
time  be  charged  with  the  execution  of  the  trusts  herein  and  hereby 
created  and  expressed,  whether  the  same  be  said  Trust  Company  or  its 
successor  or  successors.  The  Trustee  may  resign  and  be  discharged  of 
said  trusts  by  giving  notice  in  writing  of  its  intention  so  to  do  to  said 
Railroad  Company,  its  successors  or  assigns,  at  least  ninety  days  be- 
fore such  resignation  shall  take  effect,  or  such  shorter  notice  as  said 
Railroad  Company,  its  successors  or  assigns,  shall  accept  as  sufficient. 
The  Trustee  may  also  be  removed  upon  reasonable  notice,  at  the 
request  of  the  holders  of  a  majority  of  said  bonds ;  and  in  the  event 
of  a  vacancy  in  the  trusteeship,  however  arising,  a  new  trustee  may  be 
appointed  in  such  manner  as  may  be  agreed  upon  by  and  between  said 
Railroad  Company  and  the  holders  of  a  majority  of  said  bonds ;  or,  in 
the  event  of  their  failure  to  agree,  by  any  Justice  of  the  Supreme  Court 
of  the  State  of  New  York,  upon  application,  made  in  the  First  Judicial 
District  of  said  State,  by  said  Railroad  Company,  or  by  the  holders  of 
a  majority  of  said  bonds,  and  upon  such  notice  to  the  other  party  as 
such  Justice  may  prescribe. 

ARTICLE  TWELFTH.  Said  Railroad  Company,  its  successors  and 
assigns  shall,  from  time  to  time,  as  often  as  thereunto  requested  by  the 
Trustee,  execute  under  its  or  their  corporate  seal  or  seals,  acknowledge 
and  deliver  all  such  further  deeds,  assignments  and  assurances  in  the 
law  for  the  better  and  more  effectually  conveying,  assigning  and  assur- 
ing to  the  said  Trustee  and  its  successors  upon  the  trusts  and  for  the 
purposes  hereinbefore  expressed,  all  the  property,  estate,  franchises, 
rights  and  liberties  covered,  or  intended  to  be  covered  by,  and  em- 
braced in  these  presents,  as  by  the  said  Trustee  or  its  successors,  or  its 
or  their  counsel  learned  in  the  law,  may  be  reasonably  devised,  advised 
or  required. 

ARTICLE  THIRTEENTH.    The  said  Trust  Company,  for  itself  and  its 


16 

successors,  accepts  the  trusts  created  and  assumes  the  duties  imposed 
by  this  instrument,  upon  the  following  terms  and  conditions  : 

1.  The  Trustee  may  select  and   employ,  in  and  about  said  trusts 
and  duties,  suitable  agents  and  attorneys,  whose  reasonable  compensa- 
tion  shall   be   paid  to  said  Trustee  by  said  Railroad  Company ;   or,  in 
default  of  such  payment,  shall  be  a  charge  upon  the  hereby  mortgaged 
property  and  its  proceeds,  paramount  to  said  bonds ;   and  the  Trustee 
shall  not  be    liable   for   any  neglect,  omission  or  other  wrong-doing  of 
any  such  agent  or  attorney,  if  reasonable  care  has  been  exercised  in  his 
selection ;  nor  shall  it  be   otherwise    answerable,  save  for  its  own  willful 
negligence  or  default. 

2.  The  Trustee  shall  not  be  bound  to  take  any  action  hereunder 
unless  thereto  requested  in  writing  by  the  holders  of  at  least  one-fourth 
of  all  of  said  bonds  then  outstanding,  nor  unless  such  request  be  ac- 
companied  by  satisfactory  indemnity  against   all   costs,  expenses    and 
liabilities  incident  to  the  desired  action. 

3.  The   Trustee   shall   not   be   bound  to  recognize  any  party  as  a 
holder  of  any  of  said  bonds,  nor  to  take  any  action  at  his  request,  unless 
his  bonds  are  submitted  to  the  Trustee  for  inspection ;  nor  then,  if  the 
ownership  of  any  of  said  bonds  be  questioned,  until  the  title  thereto  is 
satisfactorily  established. 

4.  The  Trustee  shall  not  be  bound  to  take  any  action  beyond  the 
proper  recording  of  this  instrument  as  a  mortgage  of  real  estate,  for 
perfecting,  perpetuating  or  keeping  good  the  lien  of  these  presents  upon 
any  portion  of  the  hereby  mortgaged  property,  real  or  personal,  rights, 
liberties  or  franchises  ;  but    said    Railroad  Company,  its  successors  and 
assigns,  shall,  from  time  to  time,  do  all  things  needful  in  that  behalf. 

5.  The  Trustee  shall  be  entitled  to  reasonable  compensation  for  its 
services,  and  to  reimbursement  of  all  expenses  properly  incurred  therein, 
including  the  expenses  of  the  proper  prosecution  or  defense  of  any  suit 
or  proceeding  instituted  by  or  against  it ;   such  compensation   and  ex- 
penses to  be  a  first  charge  upon  any  fund  which  may  come  to  the  hands 
of  the  Trustee,  or,  if  there  be  no  such  fund,  then   to  be  paid  by  said 


17 

Railroad  Company,  or  by  the  party  at  whose  instance  such  services  shall 
have  been  performed  or  expenses  incurred. 


<LalhJCV£Of  ,  the  said  Railroad  Company  has  caused 
these  presents  to  be  signed  by  its  President,  sealed  with  its  corporate 
seal,  and  attested  by  its  Secretary,  and  the  said  Trust  Company,  to 
signify  its  acceptance  of  the  trusts  hereinbefore  created,  has  caused  these 
presents  to  be  signed  by  its  President,  sealed  with  its  corporate  seal, 
and  attested  by  its  Secretary,  the  day  and  year  first  above  written. 

THE  VERDIGRIS  VALLEY,  INDEPENDENCE  AND  WESTERN 

RAILROAD  COMPANY, 
[L.  s.]  By  HENRY  FOSTER, 

President. 
Attest  : 

JNO.     McCULLAGH, 

Secretary. 

AMERICAN  LOAN  AND  TRUST  COMPANY, 
[L,  s.]  By  GEO.   S.   HART, 

Vice-President. 
Attest  : 

W.   D.   SNOW, 

Secretary. 


18 

COUNTY  OF  MONTGOMERY,  ^ 

vss. : 
State  of  Kansas,          ) 

On  this  fifteenth  day  of  February,  1886,  before  me,  A.  W.  SHULTHIS, 
a  Notary  Public  in  and  for  said  county,  personally  appeared  Henry 
Foster,  who  being  by  me  duly  affirmed,  did  depose  and  say  that  he 
resided  at  Independence,  in  the  State  of  Kansas ;  that  he  was  the 
President  of  The  Verdigris  Valley,  Independence  and  Western  Railroad 
Company;  that  the  seal  affixed  to  the  foregoing  instrument  purporting 
to  be  the  seal  of  said  Railroad  Company  was  such  seal ;  that  the  same 
was  affixed  thereto  by  order  of  the  Board  of  Directors  of  said  Railroad 
Company ;  and  that  he  signed  his  name  thereto  by  the  like  authority ; 
and  he  acknowledged  before  me  that  he  executed  said  instrument  as 
the  act  and  deed  of  said  Railroad  Company  for  the  purposes  therein 
specified. 

WITNESS  my  hand  and  official  seal  the  day  and  year  above  written. 
My  Commission  as  Notary  Public  expires  on  the  iyth  day  of  January, 
1888. 

[L.  s.]  A.   W.   SHULTHIS, 

Notary  Public  in  and  for  Montgomery  County,  Kansas. 


19 

STATE  OF  NEW    YORK, 
County  of  New  York. 


K,-) 

VSS.  : 

'^    ) 


On  this  second  day  of  February,  1 886,  before  me,  WILLIAM  H. 
CLARKSON,  a  Notary  Public  for  New  York  County,  and  a  Commissioner 
for  the  State  of  Kansas,  in  the  State  of  New  York,  personally  appeared 
George  S.  Hart,  who  being  by  me  duly  sworn,  did  depose  and  say  that 
he  resided  in  the  City  of  New  York;  that  he  was  the  Vice-president  of 
the  American  Loan  and  Trust  Company ;  that  the  seal  affixed  to  the 
foregoing  instrument  purporting  to  be  the  seal  of  said  Trust  Company 
was  such  seal ;  that  the  same  was  affixed  thereto  by  order  of  the  Board 
of  Directors  of  said  Trust  Company ;  and  that  he  signed  his  name  thereto 
as  Vice-president  by  the  like  authority;  and  he  acknowledged  before 
me  that  he  executed  said  instrument  as  the  act  and  deed  of  said  Trust 
Company  for  the  purposes  therein  specified. 

WITNESS  my  hand  and  official  seal  the  day  and  year  above  written. 
[L.  s.]  WILLIAM  H.   CLARKSON, 

Commissioner  for  the  State  of  Kansas  in  New  York,  and 
Notary  Public  for  New  York  County,  N.  Y. 


[11297] 


CORM  NO.  DD6 


G.yl«r<»*7,T 

T.r«sf* 


M114721 


THE  UNIVERSITY  OF  CALIFORNIA  UBRARY 


